As of: February 20, 2024, 7:21 a.m
By: Robert Wallenhauer
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Experts see a permanent increase in raw material prices in the near future.
Future supplies of critical minerals could be at risk.
Frankfurt - “The energy transition will make our economy much more resource-intensive,” says Evy Hambro, portfolio manager at the world’s largest asset manager Blackrock, to
Handelsblatt
.
Regardless of whether it is an electric car, wind turbine or solar cell - more raw materials such as copper, cobalt or nickel will be needed for all of these building blocks of the energy transition.
The finance manager expects a so-called “super cycle” for minerals.
So a phase of long-lasting price increases.
Energy transition: A shortage of raw materials could come in 10 years
The BlackRock manager is not alone with this opinion.
The resource requirements of an economy that relies on renewable energies are very different from those of a fossil economy, Tilman Galler, an analyst at JP Morgan, also found in a study.
In contrast to coal or gas power plants, wind turbines and solar cells do not require any fuel.
However, they use significantly more raw materials in production, writes Galler: “To replace a coal-fired power plant with offshore wind turbines, six times the amount of minerals (copper, zinc, nickel, chromium and rare earths) is required.
For gas power plants it is 13 times as much.”
Energy transition in danger?
Supplies of important minerals are at risk.
© BildFunkMV/Imago
One reason for the threat of long-term rising raw material prices is the speed at which the energy transition is being implemented.
“Can the growth in the supply of raw materials keep up with the speed of the energy transition?
If not, that will of course have an impact on prices, which will then rise,” says BlackRock manager Hambro in an interview with
Handelsblatt
.
“Depending on the speed of the transition to clean technologies, demand for critical minerals could grow at a rate of 70 percent to 110 percent by 2030,” the JP Morgan analysis said.
Weak investment activity endangers future mineral supplies
In his study, analyst Tilman Galler describes a problem that could arise from the demand shock: There could be a shortage of supply of critical raw materials in the period from 2025 to 2030.
Mining companies have recently reduced their investments.
This happened for financial reasons, but also because the Paris Climate Agreement tightened environmental regulations and “environmental damage caused by exploration and production increased public and investor awareness”.
“The weak investment activity endangers the future supply of critical minerals,” concludes Galler, because the development of new mines that would produce the urgently needed minerals could take up to 15 years.
In addition to the price increase, Evy Hambro from Blackrock sees another problem: mining the required raw materials is very CO₂-intensive.
“We have to find solutions for this.
Because if we stop burning fossil energies for our energy production and instead burn fossil energies for raw material production, we will not solve the problem,” he tells
Handelsblatt
.
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